Nearly halfway through the year, the ProShares Pet Care ETF (CBOE: PAWZ) is higher by almost 9% while the S&P 500 is sporting a loss of 2.77%. Alone, that’s impressive, but there’s more to the PAWZ story.
PAWZ, the first and only dedicated pet care, and retail ETF seeks investment results, before fees and expenses, that track the performance of the FactSet Pet Care Index. The fund seeks to invest substantially all of its assets in the securities included in the index. Under normal circumstances, the fund will invest at least 80% of its total assets in the component securities of the index. The index consists of U.S. and non-U.S. companies that potentially stand to benefit from interest in, and resources spent on, pet ownership.
Importantly, PAWZ is proving to investors that the pet care thesis has mettle in a trying market environment.
“In a recent interview on Bloomberg TV, Simeon Hyman, ProShares Global Investment Strategist, explains how the increase in pet adoptions while many people stay at home is an extension of the long-term trends in pet ownership,” according to ProShares.
Pertinent PAWZ
PAWZ includes sectors such as veterinary pharmaceuticals, diagnostics, services, and product distributors; pet and pet supply stores, and pet food and supply manufacturing. Healthcare and retail stocks make up a significant portion of the PAWZ roster and the ProShares ETF has the potential to outperform traditional funds tracking those sectors.
Hyman “notes that the performance of pet products retailers like Chewy has been driven by pet owners’ desire to have quality pet goods delivered to their doorstep—even as economic headwinds set in. However, the pet care industry is composed of much more than food and toys,” according to ProShares. “Veterinary care, diagnostic, and pharmaceutical companies provide much-needed services to companion animals. And, unlike in human health care, ‘there is no Medicare for dogs.’”
On that note, Anicom Holdings, Inc., Japan’s leading pet insurance provider, recently joined General Mills (NYSE: GIS) as new additions to the PAWZ lineup.
“Anicom Holdings commands more than a 50% share of the rapidly-expanding pet insurance market in Japan, which has grown at roughly 20% per annum for the past five years,” according to ProShares.
PAWZ is higher by almost 10% over the past month.
For more on tactical strategies, please visit our Tactical Investing Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
